Manager’s Role • Procure inputs in the least cost manner, like point B. • Provide incentives for workers to put forth effort. • Failure to accomplish this results in a point like A. • Achieving points like B managers must Q Q

Use all inputs efficiently. Acquire inputs by the least costly method.

Conclusion • The optimal method for acquiring inputs depends on the nature of the transactions costs and specialized nature of the inputs being procured. • To overcome the principal-agent problem, principals must devise plans to align the agents’ interests with the principals.

Recommend Documents

Economics) Online Free, Read Best Book Managerial Economics Business ... with new ways to assess student performance in the managerial economics course. ... microeconomics produce a new offering that is easier to teach from and more ...

... explain the adoption of business to business e commerce using five business factors external .... Strategy (Mcgraw-Hill Economics) Online , Read Best Book Online ... Strategy provides a complete solution designed to help students use tools.